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Tickers in this Article: LLY
Eli Lilly (NYSE:LLY) will release its third quarter results on Wednesday, October 24, 2012. Analysts are expecting earnings per share of 82 cents after the company booked a profit of only $1.13 a share a year earlier.

In most situations, when earnings do not meet analyst estimates, a business' stock price will tend to drop. On the other hand, when actual earnings beat estimates by a significant amount, the share price will likely surge. SEE: 5 Tricks Companies Use During Earnings Season

What to Expect: Analysts are projecting earnings of 82 cents per share for Eli Lilly, 27.4% less than a year ago, when the company reported earnings of $1.13 per share.

In the last 90 days, this has risen from 79 cents. Analysts are projecting earnings of $3.39 per share for the fiscal year.

Eli Lilly's expected revenue of $5.62 billion for the quarter is below last year's reported figure of $6.15 billion by 8.6%. The anticipated revenue for the fiscal year is $22.72 billion.

Company Performance: Over the last three quarters, revenue has dipped. In the most recent quarter, it fell 10.4% to $5.6 billion. Previously, revenue slipped 4.1% in the first quarter and 2.3% in the fourth quarter of the last fiscal year.

While the company has been profitable for the last eight quarters, income has fallen year-over-year by an average of 14.7% over the past four quarters.

LLY's P/E ratio of 14.9 is consistent with the industry average. The price/earnings ratio is calculated by taking a stock price and dividing it by the earnings-per-share (EPS). To determine the P/E ratio, an investor divides the market price of the stock by the earnings-per-share (EPS) of the stock. SEE: Profit With The Power Of Price-To-Earnings

Over the past quarter, the stock price has increased from $43.83 on July 23, 2012 to $53.81. The price is within 18 cents of its 52-week high, which was set on October 17, 2012 at $53.99. Eli Lilly's best recent streak was when its price gained $5.51 per share between August 9, 2012 and October 5, 2012.

The Competition: Eli Lilly develops and manufactures pharmaceutical products as well as animal health products. They have become increasingly pessimistic about the stock, as the number of buy ratings has dropped slightly over the last three months.

The company's closest competitor in the biotechnology and drugs industry is Johnson & Johnson (JNJ). Analysts are less optimistic about Eli Lilly than about Johnson & Johnson. Fourteen out of 22 analysts rate the latter a buy compared to five of 15 for the former.

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